Sustainable Profitability under Macroeconomic and Monetary Pressures: A Panel Study of Cement and Ceramic Industries in Bangladesh (2013–2023)

Abstract

This study analyzes panel data from five cement and five ceramic businesses over an eleven-year period, 2013–2023, to investigate the sustainable profitability dynamics of Bangladesh's manufacturing industry. The study examines how firm-level profitability, measured by Return on Assets, is influenced by internal financial indicators such as Return on Equity and Net Profit Margin, macroeconomic indicators such as GDP growth, inflation, and trade volumes, and monetary policy variables such as M2 money supply and remittances. Feasible Generalized Least Squares and robust diagnostic testing are used to address econometric issues including heteroskedasticity, autocorrelation, cross-sectional dependency, and multicollinearity. The findings indicate that operational efficiency, represented by Net Profit Margin, consistently drives sustained profitability, while expansionary monetary policy, measured through M2 growth, has a slight negative effect. The cement industry appears more resilient to macro-financial shocks because of structural advantages and demand inelasticity. The study has implications for targeted macro-financial planning, policy design, and long-term industrial sustainability in emerging economies.